Further reading

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Structural Equation Models (SEM) amalgamate regression analysis, path analysis and factor analysis, allowing for more richly detailed statistical models to be specified and compared to data than by using these techniques individually.
Historically, SEM models were confined to the analysis of continuous observed data, limiting their usefulness in applied social research, where many phenomena are inherently discrete or are measured only with coarse-grained instruments.
Advances in recent years have made SEM methods for categorical data available to applied researchers.